"HandBrake (versions < 0.9.4) can do this for free. AVI support was removed in 0.9.4 so any previous version should be fine.
From Handbrake's page:
Focus on what we do best
As we've had on our roadmap for quite awhile now, one of our goals for version 0.9.4 was to refocus on HandBrake's key strengths and to remove dead weight. As part of this process, several containers and a codec have been removed from HandBrake.
AVI: AVI is a rough beast. It is obsolete. It does not support modern container features like chapters, muxed-in subtitles, variable framerate video, or out of order frame display. Furthermore, HandBrake's AVI muxer is vanilla AVI 1.0 that doesn't even support large files. The code has not been actively maintained since 2005. Keeping it in the library while implementing new features means a very convoluted data pipeline, full of conditionals that make the code more difficult to read and maintain, and make output harder to predict. As such, it is now gone. It is not coming back, and good riddance.
You can get older versions of HandBrake from FileHippo."
SUPER (http://www.erightsoft.com/SUPER.html) I think is the best. But you must have the last codecs in your computer to be allowed to convert to some filetypes. Then download also K-Lite Mega Codec Pack.